2.2 Cost of motivating Resources
Besides, managers are required to invest different resources and time to ensure that the organization reaches prospective growth. The needs to engage with the investors to influence the trading decision are based on the appropriate strategic decisions that regurgitate the firm financial position. Costs of such an investments are shared between investors and managers; however, the managers will be required to invest their energy at work. In any case, the success or the failure of the decision naturally influences both the investors and the managers. Besides, as illustrated earlier, the need to protect their reputation depends on the strategic decision that they are willing to make (Choi, Kwak, & Choe, 2010). The benefits from increased liquidity as well as the risk from the reduced liquidity reflect and shapes on the best interests of such an investment decision. Voluntary disclosure theory proves that risk of tackling a certain obligation increases the chances for valuation of the company while making the right strategic decisions on behalf of the company.
2.3 Costs of Soliciting New Funds
Besides, since managers provide voluntary disclosure to rejuvenate the Tate and Lyle financial position for capital growth is naturally imminent. Naturally, most strategies are facilitates by a project in place. However, the company will be required to borrow heavily so that it can allocate sufficient funds for the proposed strategy. Tate and Lyle need to increase the firm size in the following year, which is an expensive procedure that requires tackling the right investment decisions and other similar takeovers. The cost involved is that managers are required to raise the capital for financing such a decision that enables the firm to make certain strategic decisions that relates to motivating the capital of the firm. The competitiveness relates to the investment decisions.
2.4 Disclosure would weaken the Firm
Disclosure naturally influences the firm competitive position where the interests of investors relate to the proprietary costs that are related to the financial decisions of the company. These proprietary costs arise when the firm reveals decisions that can damage the firm. In this case, the competitive position of the firm. Investors might end up detesting Tate and Lyle new strategy of business, hence leading to possible dismembering of the firm. In addition, there is a trade-off between disclosure to their rivals and reducing the costs of capital investment to their rivals. The raising of additional equity depends on the possibility of withholding more information concerning the value of the company based on the investment decisions that the firm is willing to encounter.
2.5 Litigation of the Firm
The firm could also be facing possible litigation where managers try to avoid possible litigation costs. However, the disclosure process revolves around the specific circumstances that are surrounding the legal action that arise from the untimely disclosure of management decision. In this case, the equilibrium and the increased proprietary costs motivate managers to make strategic decisions of operate. However, in the process of disclosing, investors might refute the strategy. The refute procedure motivates the organization to the decrease the disclosure process while ensuring that the decisions that the organization makes depends naturally on the ability to second such investment decisions with facts of success.
3. Benefits of Disclosure
3.1 Managing Costs
The disclosure process is naturally beyond the managerial objective. The need to take care of costs while ensuring that the company is performing with the desired integrity values leads the procedure of the disclosure. However, the need for considering managerial interests directs the growth of disclosure. Tate and Lyle therefore disclosed the organizations corporate strategy because they felt that doing so is a positive procedure of letting the company grows. The relationship between information gap and economic risk naturally leads the procedures of disclosures. When a disclosure happens, it means that the business and economic could be facing favorable or risk. The organization premium disclosure pattern is based on the cost of capital, which is based on the information gap. Heyden et al., (2014) explain that the rational investment decision helps in motivating the process of disclosure. In such an event, the company is more motivated to reveal the investment decisions that it is willing to take in a given financial period. Hence, disclosure helps managers to share with the company risk information that might be influencing the company strategic decision.
3.2 Creating Motivation for Investment
The performance of the company naturally depends with the investment decisions. Hence, the managers disclose information that helps in motivating investment decisions; hence, they need an approval to the shareholder of the organization. In addition, there is a need to consider that such company information is costly; hence, disclosure comes as way to share the information promptly (Choi, Kwak, & Choe, 2010). Alongside obtaining approval from the investors, disclosure helps managers to offset themselves from unnecessary risk of conducting Tate and Lyle's business. In case of risks, the managers will be able to defend their position based on the disclosure process. Moreover, such a disclosure will empower managers to take a firm grip on the strategy. The disclosure process acted as a huge investment presented to the company by other managers. Investment might decide to back up the strategy by subsequently adding more money on the firm.
3.3 Negotiation Process
The disclosure acts as a negotiation process where the company explained to the organization the required decisions with other managers. The organization tackles good investment opportunities rather than risk securities to finance these decisions. The finance decision depends on the climate surrounding the investment process. Hence, the profitability of the compan...
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Essay Example on Disclosure of an Organization. (2021, Mar 31). Retrieved from https://proessays.net/essays/essay-example-on-disclosure-of-an-organization
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